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Deficits do matter, particularly so, when there are sovereign debt crises that continue to cycle through major economies. Of course, when Dick Cheney made his remarks we were exiting an unprecedented era of prosperity where the U.S. government was running surpluses and the Federal Reserve was openly wondering how it was going to conduct monetary policy in an environment where the market had too few (not a typo!) Treasury securities. What a difference a decade makes.

The most fascinating part of the latest drama is that we now call "bipartisan compromise" a situation where the federal government spends more and taxes less, and that there continue to be no political mechanisms in place to reconcile our long run needs and desires with our long run ability and willingness to pay for those same needs and desires.

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